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Bank Of Baroda
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« Mar 13
Chairman's Speech (Bank Of Baroda) Year : Mar '14
Dear Stakeholder,
 
 I am delighted to report that during the year 2013-14 (FY14), Bank of
 Baroda delivered a healthy performance that is consistent with our
 guidance and promise to our stakeholders. With the help of our well
 crafted business model, we reaffirmed our standing as the largest
 nationalised bank of India in terms of total business. Moreover, we
 continued to make strong progress in our financial soundness indicators
 that are at the heart of our business strategy.
 
 At this point, I deem it most appropriate to review the macroeconomic
 environment, within which Bank of Baroda operated during FY14.
 
 Indian Economic Review
 
 India''s underlying economic growth trends remained weak during FY14.
 The Central Statistical Organisation has estimated Indian economy to
 have grown by 4.9% in FY14, a shade lower than the government''s earlier
 projection but marginally above 4.5% clocked in FY13. While the farm
 sector has registered a healthy growth of 4.6%, a deep slowdown
 continued in the mining and manufacturing sectors that suffered from
 low investment sentiment, weak demand and policy bottlenecks. This is
 the first time since 1991-92 that India''s manufacturing sector has
 contracted, reflecting the stress confronting the sector. The services
 sector that accounts for nearly 60% of the economy, is expected to grow
 6.9%, slightly slower than the previous year''s expansion of 7.0%.
 
 High and persistent inflation remained a key macroeconomic challenge
 facing India throughout the year FY14. While
 
 the WPI-based inflation averaged at 5.92% in FY14, the CPI-based
 (retail) inflation averaged at 9.49%. The high inflation was a result
 of a number of factors, including elevated food prices feeding quickly
 into wages and core inflation, entrenched inflation expectations,
 sector-specific supply constraints particularly in agriculture, energy
 and transportation, the pass through from a weaker rupee and continuous
 upward adjustment in fuel prices.
 
 Around June-July, 2013, India was faced with significant debt capital
 outflows and pressures on its currency, equity and bond markets, as
 global liquidity conditions tightened.  Investor concerns were
 amplified with India''s high current account and fiscal deficits,
 persistent inflation and weaker macroeconomic fundamentals. The Reserve
 Bank of India (RBI) controlled the situation by tightening liquidity,
 relaxing limits on foreign direct investments (FDI) and external
 commercial borrowings (ECBs), encouraging non-resident Indian
 remittances and sharply increasing gold import duties.
 
 Persistent inflation worries and external sector vulnerabilities
 prompted the RBI to raise the key policy rate - Repo rate by 75 bps
 between early May, 2013 and end Jan, 2014 despite growing industrial
 weaknesses.
 
 On the reforms front, India''s parliament passed the land acquisition,
 pension and companies bills during FY14 and the Cabinet Committee on
 Investments (CCI) approved a sizeable quantum of previously stalled
 infrastructure projects. On the fiscal front, measures were implemented
 to raise diesel prices and reduce the financial losses of state
 electricity boards.
 
 India''s external vulnerabilities fell significantly in the second half
 of FY14, helped by policy actions to shrink the current account and
 strengthen capital flows.
 
 The Interim Budget presented by the government for FY15, reflected
 continued fiscal consolidation, with a fall in the fiscal deficit from
 4.9% of GDP in FY13 to 4.6% of GDP in FY14 (as per the revised
 estimates) and further to 4.1% of GDP in FY15. While the revised
 estimate of fiscal deficit is lower in FY14, it is achieved by a
 reduction in plan revenue expenditure and capital expenditure. The
 subsidies, interest payments and pension have overshot the budgeted
 target.
 
 Against the backdrop of a slowdown in the domestic economy and tepid
 global recovery, the growth of Indian banking sector too remained under
 pressure in FY14. Both deposits and credit grew at a slower pace of
 14.6% and 14.3%, respectively on account of high inflation and subdued
 loan demand. The elevated deposit rates combined with lower credit
 volumes suppressed the net interest income of commercial banks.
 Moreover, as a result of the challenging macroeconomic environment and
 worsened repayment capacity of borrowers, banks'' asset quality
 deteriorated further in FY14 with a swollen pipeline of restructured
 assets.
 
 However, banks with relatively stronger systems of credit monitoring
 and cash recovery were better equipped to shoulder this challenge and
 delivered a sound performance during FY14 despite stressful
 macroeconomic environment.
 
 Bank of Baroda: A Credible Show in Tough times
 
 During FY14, your Bank was able to post strong growth of 20.4% (y-o-y)
 in global business supported by 20.1% in global deposits and 21.0%
 growth in global advances despite sluggish economic environment. A
 major part of this growth was driven by two initiatives in the past one
 year - a) set up of a new vertical for mobilization of deposit
 resources and b) focused efforts to diversify its loan-book in favour
 of retail, MSME and agriculture credit, as opportunities in large-sized
 corporate segment had dried up.
 
 Your Bank''s international business too grew at a stronger pace of 33.3%
 (y-o-y), partly driven by massive rupee depreciation during FY14.
 Healthy mobilization of domestic CASA deposits at the rate of 16.0%
 (y-o-y) and shedding of high-cost preferential deposits helped your
 Bank defend its NIM in domestic operations at 2.87% in FY14.
 
 Supported by healthy Net Interest Income (at Rs 11,965 crore), Core
 Fees (Rs 2,117 crore), Treasury Gains (Rs 1,783 crore) and Recoveries
 from Written-Off Accounts (Rs 563 crore) combined with prudent control
 over Total Expenses (up 14.4%, y-o-y), your Bank posted Gross Profit at
 Rs 9,291 crore (up 3.2%, y-o-y) and Net Profit at Rs 4,541 crore (up
 1.3%, y-o-y) during FY14.
 
 Your Bank''s incremental slippages and additions to restructuring
 pipeline kept on declining sequentially throughout the year FY14 in
 line with the Bank''s guidance at the beginning of the year. Between the
 third quarter and the fourth quarter of FY14, your Bank''s Gross NPA
 declined from 3.32% at end-December, 2013 to 2.94% at end-March, 2014
 and Net NPA declined from 1.88% to 1.52%. Improvement in asset quality
 was broad-based and partly driven by asset sales worth Rs 671.93 crore
 in Q4,
 
 FY14. Restructuring activity too remained low in FY14 as compared to
 its level in FY13.
 
 The Bank''s Provision Coverage Ratio (PCR) too improved sequentially
 from 61.68% in Q2, FY14 to 62.22% in Q3, FY14to65.45%inQ4, FY14. As you
 know, PCR is a macro- prudential measure, with a view to augmenting
 provisioning buffer in a counter-cyclical manner, when the banks are
 making good profits.
 
 Your Bank''s Capital Adequacy Ratio continued to reflect its capital
 strength. The CRAR was 12.87% in terms of Basel II and 12.28% in terms
 of Basel III at end-March, 2014.
 
 In nutshell, your Bank further strengthened its financial position in
 the Indian banking space during FY14 supported by its cautiously
 optimistic business model, lower risks on asset quality, focus on CASA
 deposits and strong capital positioning.
 
 Strategic Initiatives during FY14
 
 Corporate Credit
 
 The year FY14 was marked by low credit appetite by the corporate sector
 on account of weak investment sentiment.  Your Bank had to think
 innovatively to garner relevant corporate business opportunities.
 During FY14, your Bank introduced a new product christened as Top-Up
 Facility for meeting the working capital requirements of corporate.
 Additionally, your Bank also reviewed and revisited the features of
 existing products to make them more competitive such as Corporate
 loans, Bid Bond Guarantees, Loans against future receivables etc.
 Moreover, your Bank rationalized the interest rate structure so as to
 spur the overall investment sentiment.
 
 As a strategic business decision, your Bank''s Project Finance
 Department was hived off during FY14and merged with Baroda Capital
 Markets Ltd, which has a dedicated team of professionals. Baroda
 Capital Markets Ltd. now supports the Bank''s Corporate Credit Division
 by undertaking Techno Economic Viability (TEV) studies and arranging
 funds for corporate by way of Loan Syndication, etc.
 
 Retail Business
 
 With the purpose to place special emphasis on deposits as an important
 resource, your Bank created a new business vertical Deposit Resources
 so as to create a strong liability franchise and generate synergy in
 business models. This new vertical focuses on ensuring consistent and
 significant growth in Low-cost Deposits (CASA) and Retail Term
 Deposits. A number of initiatives were undertaken during the year FY14
 for strengthening and reviving the relationship with existing customers
 for improving CASA deposits and promoting debit cards. Furthermore,
 some special drives were launched for activation of dormant accounts.
 
 From the assets side also, your Bank placed added thrust on retail
 business to make its loan-book more balanced.  To achieve this, your
 Bank reduced the rate of interest on Baroda Housing Loan so as to make
 it attractive and competitive. The Baroda Housing Loan was made
 available at Base Rate, i.e., at 10.25% for any amount and any tenure
 to new as well as existing borrowers. The rates were also reduced and
 made attractive on products like Loan against Future Rent Receivables,
 Car Loans, etc.
 
 Encouraged by the success of its novel business model - Retail Loan
 Factory (RLF) - your Bank opened five New RLFs at Bharuch, Junagarh,
 Visakhapatnam, Meerut and Moradabad during FY14 taking the total
 strength of RLFs to 45.
 
 MSME Business
 
 A number of initiatives were taken by your Bank to support the MSME
 sector, given its potential to generate employment and growth. First of
 all, the rate of interest on MSME loans was rationalized in June 2013
 to make such loans more attractive and competitive. Your Bank also
 introduced a new product named as MSME Capex Loan and Capex Card
 during FY14 to take care of this sector''s specific requirements. To
 further promote its MSME business, your Bank celebrated MSME Festival
 from 1st November 2013 to 28* February 2014. In the larger interest, to
 deliberate on the issues facing the MSME sector, your Bank organized
 the MSME Conclave with heads of its SME Loan Factories and also
 arranged the MSME Round Table conference at various places.
 
 Your Bank has a rich set up of 52 SME Loan Factories (SMELFs), which
 sanctioned loans to the tune of Rs 17,230 crore during the financial
 year under review.
 
 Priority Sectors
 
 Considering the significance of agriculture in the socio- economic
 fabric of India, your Bank launched Agriculture Loan Factories (in line
 with the Retail and SME Loan Factories) in FY14 for bettering customer
 service and improving the volume and quality of agriculture advances.
 These factories are expected to help your Bank to lay specific focus on
 agriculture loans. As in the past years, your Bank conducted Special
 Campaigns during FY14 to augment agriculture advances in both the Rabi
 and Kharif seasons.
 
 Furthermore, your Bank introduced tailor-made area specific schemes to
 cater to the specific needs of the local farming community. Appropriate
 concessions in interest rates and charges were given to retain its
 attractiveness. Your Bank strongly supported the growth and development
 of social sectors through its various outfits like Baroda Swarojgar
 Vikas Sansthan (BSVS), Baroda R-Seti Centers, Financial Literacy
 Centres and Micro Loan Factories.
 
 Financial Inclusion
 
 Your Bank has been a frontrunner in the Financial Inclusion efforts. It
 looks at it not just as a social commitment but as an effective and
 profitable business proposition. As per the targets set under the
 three-year plan period i.e. for 2013- 14 to 2015-16, your Bank has
 achieved the annual targets of village coverage well ahead of its
 timeline for the FY14.
 
 Moreover, it launched the Kiosk Banking Model by virtually inaugurating
 1,000 Kiosks on its 106th foundation day, i.e.  20* July 2013. It may
 be noted that your Bank has arrangements with Common Service Centers
 (CSCs) to avail their services as Business Correspondents for running
 the Kiosk centers. These centers are ICT enabled front- end service
 delivery points at the village level and urban centers for delivery of
 government, financial, social and private sector services in the areas
 of agriculture, health, education, entertainment, banking, insurance,
 pension, utility payments, etc.
 
 During FY14, your Bank began addressing the issue of urban financial
 inclusion by launching Urban Kiosks at Abgaonkala in Harda district of
 Madhya Pradesh on 19* January 2014. As on 31st March 2014, your Bank
 set up more than 1,000 Urban Kiosks at various locations across the
 country.
 
 Asset Quality
 
 Depressed macro-economic environment for more than two years continued
 to haunt the productive sectors during FY14 also, as a result of which,
 the asset quality in the banking Industry remained under stress.
 However, your Bank with its rigorous credit monitoring and NPA recovery
 systems was able to arrest effectively the rising trend in slippages
 during the year under review.
 
 From day one of the year FY14, your Bank kept a close watch on
 potential NPAs. For this, it constituted a Slippages Prevention Task
 Force (SPTF) at the regional level to keep a tab on stressed accounts.
 Each and every borrower''s account was tracked closely to avoid any last
 minute rise in NPAs. Besides this, the nodal officers at each DRT (Debt
 Recovery Tribunal) centre were assigned the role of a follow-up of
 legal case on day to day basis so as to minimize delays in obtaining
 decrees and execution thereof in order to expedite and maximize
 recoveries.
 
 Your Bank organized a number of Lok Adalats and Recovery Camps at
 village/ town level to provide special focus on recovery of small
 accounts. Your Bank also launched an incentive-linked recovery scheme
 Sankalp VI, to enlist personalized attention of each and every staff
 member in pursuing recovery efforts in small value accounts with an
 outstanding up to Rs 25 lakh and recovered Rs 155.19 crore during FY14
 under the said scheme.
 
 As a part of its strategy of NPA management, your Bank put for sale of
 NPL accounts under individual as well as portfolio sale categories
 during the last quarter of FY14 and elicited good response from the
 market. In fact, it could sell 23 accounts (with outstanding dues at Rs
 671.93 crore) and realized against them Rs 522.21 crore in a
 combination of cash and security receipts.
 
 Customer Service
 
 In Bank of Baroda, we believe in providing world- class customer
 service with a personal touch and we continuously strive towards
 improvement. Towards this goal, your Bank has been effectively using
 technology.  For instance, your Bank has a web-based online complaint
 registration and redressal system in the name of Standardized Public
 Grievance Redress System (SPGRS).  An icon is provided on your Bank''s
 website through which the Bank''s customers can lodge complaints online.
 The system not only facilitates a speedy redressal but also enables the
 Bank to maintain centralised data-base of all complaints. Recently,
 your Bank has modified the SPGRS so that even non-customers can lodge
 their complaints and/or suggestions. Moreover, your Bank''s customer can
 re-open their complaints within 15 days, if they are not satisfied with
 the redressal system.
 
 Information Technology Structure
 
 Your Bank has been using Information and Communication Technology (ICT)
 not only to improve its own internal processes but also to increase
 facilities and services for its customers.
 
 To enhance the customer experience in alternative delivery channels,
 your Bank revamped its Internet Banking, viz., Baroda Connect to a
 great extent during FY14to enhance its look and feel, user-friendliness
 and also added more facilities. Thus, the Baroda Connect now offers a
 host of facilities ranging from creation of online FDR, recurring
 deposits to tax payments, online donations to various institutions,
 payments of premiums, aadhaar seeding through internet banking, IMPS
 (Immediate Payment services) among the others. Moreover, Internet
 Banking facility was made available on all smart-phones/ tablets
 offering comfort of anywhere banking to its customers. Internet Banking
 is now extended to your Bank''s 14 overseas territories viz.  Tanzania,
 Uganda, Kenya, Mauritius, Seychelles, Botswana, New Zealand, UAE, Fiji,
 UK, Oman, Ghana, Australia and USA. Internet banking is also provided
 in all the RRBs sponsored by your Bank.
 
 Mobile Banking - one more alternate delivery channel that offers
 various facilities to your Bank''s customers, viz., balance enquiry,
 mini statement, fund transfer, stop payment, cheque status, debit card
 blocking, and other services. To widen the usage of Mobile banking
 application, your Bank made it available in all i-Phones and i-Pads in
 addition to Blackberry, Android, and Windows devices. Immediate Payment
 Services (IMPS) was also implemented in FY14 covering Person to Account
 (P2A), Merchant Payments (P2M), Aadhaar based remittance (P2U).
 
 Through e-Lobbies, your Bank has moved on to the next level of customer
 engagement by enabling 24 X 7 services for its customers by installing
 devices like Bunch Note Acceptors, Self-Service Pass Book Printers,
 Cheque Deposit Kiosk, Internet Banking Kiosks in these e-Lobbies.
 
 To ensure the safety of transactions through alternate delivery
 channels, with the cyber-attacks being unpredictable and electronic
 payment systems vulnerable to new types of misuse, your Bank initiated
 various additional security measures such as issuing debit and credit
 cards only for domestic usage unless international usage is
 specifically sought by the customers, converting existing MagStrip
 Cards to Europay MasterCard and Visa (EMV) Chip card, installation of
 PIN enabled POS machines and introducing additional security in the
 form of Digital signatures for Corporate Internet Banking.
 
 During the year FY14, your Bank installed 3,624 new ATMs, opened 45
 e-Lobbies and provided a number of Bunch Note Acceptors, Self-service
 Pass book Printers, etc. to its branches. Your Bank also provided Note
 Counting Machines to almost all its branches and strengthened the
 structure of its Retail and SME Loan Factories - to mobilise business
 with quality. In short, Information Technology has made a visible
 difference in the functioning of your Bank and conduct of its banking
 operations.
 
 H. R. Initiatives
 
 Your Bank has been pursuing a balanced and comprehensive Human
 Resources policy in view of various challenges faced by the public
 sector banks in the form of large retirements, massive induction of
 talent, and huge training requirements.  Your Bank has launched Career
 Portal on its website which projects the unique aspects of working at
 Bank of Baroda. This has helped in providing a huge impetus to the
 Employer Branding of your Bank.
 
 During FY14, your Bank further strengthened its On- boarding
 Programme which aims at cultural assimilation of new recruits into
 this institution by introducing a Mentoring programme Baroda Sarthy.
 Under Baroda Sarthy, a senior employee -the Mentor handholds the new
 entrant to enable his or her smooth transition into the Bank and helps
 him or her adapt to the value system and working of your Bank. Besides,
 your Bank has also implemented Talent Management System. This system
 proactively identifies future potential leaders based on various
 criteria and also grooms them through a systematic developmental plan.
 
 To enhance the Employee Engagement, your Bank undertook various
 initiatives like conduct of satisfaction surveys and workshops for
 interaction between juniors and seniors. These workshops were conducted
 to improve the employee connect with HR and top management.
 Furthermore, to reward the top performers, your Bank very recently
 launched a revised performance linked incentive scheme for its
 employees.
 
 Against the backdrop of massive recruitments in view of large
 retirements, training and developments of new recruits has assumed
 significant importance. In the context of the growing competition, your
 Bank created a new functional position as Chief Learning Officer (CLO)
 in the Bank. The CLO is of the level of a General Manager and supports
 the organization through learning interventions.
 
 A good number of innovative steps were taken by your Bank in training
 as well. The training system of your Bank bagged the National Award for
 Innovative Training Practices in various industries by securing third
 position, awarded by the Indian Society for Training & Development
 (ISTD) during the current year.
 
 Your Bank has a Board approved comprehensive training policy so that it
 covers the entire spectrum of training activities. The training is
 imparted for improving the understanding of different products of the
 Bank. The training is conducted either within the Bank or through
 external training programmes so that employees are able to learn and
 adopt best industry practices with a wider perspective. During FY14,
 the external training programmes were organized at various prestigious
 organizations such as International School of Business (ISB) Hyderabad;
 International Management Institute (IMI), New Delhi; Centre for
 Organization Development, Hyderabad; University of Mumbai; Manipal
 Academy of Banking, Bangalore and other such institutes.
 
 Risk Management
 
 Significant emphasis is placed in your Bank on improving risk
 assessment standards and credit monitoring process to identify stressed
 borrower at an early stage. Your Bank has well-defined policies to
 address various risks - Credit Risk, Market Risk, Operational Risk,
 Liquidity Risk, etc., and the Bank sees to it that all these risks
 remain well within the risk appetite defined by its Board of Directors.
 
 By taking a series of measures, including building bank-wide risk
 management systems, streamlining business processes, innovation and
 improving management tools and methods, your Bank further solidified
 its management of all types of risks during the year FY14 to support
 the needs of its various business lines.
 
 In the year under review, your Bank reviewed its risk management
 architecture to prepare for advanced approaches under the Basel II
 framework. Your Bank applied for moving to Foundation IRB approach
 (i.e. foundation internal ratings based approach) of Credit Risk and
 received approval from the RBI for a parallel run. For Market Risk,
 your Bank has been developing a Global Mid Office in Mumbai, which will
 facilitate a cost-efficient and more effective way of measuring,
 monitoring and reporting the Market Risk positions in its global
 operations as per the Internal Model- based approach under the Basel II
 norms. In the area of Operational Risk, your Bank is implementing the
 best available solutions, which will enable the Bank to analyze and
 control its Operational Risk in a more sophisticated and effective
 manner. On implementation of the said Solution, your Bank''s
 preparedness forth quantitative and qualitative requirements of
 Advanced Measurement Approach for Operational Risk will be fully met.
 
 In orderto rationalise Transfer Price Mechanism, your Bank has
 initiated the process of switching over from the existing manual
 procedure to a new system-based solution using the software OFSAA V 6.X
 Module, which will make the exercise more scientific and realistic.
 
 You may be aware that in India, with effect from April 1, 2013,
 Basel-Ill capital regulations have begun to be implemented.  Your Bank
 has already made all transitional arrangements for a smoother
 transition to this new capital framework by March 31, 2019.
 
 Overseas Business
 
 The overseas business of your Bank continued to contribute
 significantly to its overall (global) business. Your Bank''s wide-spread
 overseas presence provides it with significant risk diversification
 benefits across the globe. Your Bank''s large network of branches in
 overseas territories and its continued thrust on overseas expansion
 helped exploit rich business opportunities even during FY14. As of 31st
 March 2014, it had operations in 24 countries with 102 offices.  These
 102 offices comprised of 60 overseas branches of your Bank, 41 branches
 of its overseas subsidiaries and one representative office. During the
 year under review, your Bank opened three new branches/offices, i.e. an
 Electronic Banking Unit at Shabiya, UAE and two branches of the
 overseas subsidiaries at Kariakoo in Tanzania and Kololo in Uganda.
 
 Key Achievements in FY14
 
 In spite of the challenging business environment, your Bank ended the
 year under review with a strong set of results.
 
 - Your Bank''s Global Business expanded by 20.4% (y-o-y) to Rs 9,65,900
 crore by end March 14. Within this, Domestic Business expanded by 15.1%
 to Rs 6,51,223 crore and Overseas Business increased by 33.3% to Rs
 3,14,677 crore.
 
 - Global Deposits registered a growth of 20.1 % (y-o-y) to Rs 5,68,894
 crore by end March 14. Within this, Domestic Deposits expanded by 10.9%
 to Rs 3,79,054 crore and Overseas Deposits rose by 43.6% to Rs 1,89,840
 crore.
 
 - Amidst aforementioned challenges, Your Bank''s CASA Deposits increased
 by 22.19% (y-o-y) to Rs 1,46,488 crore.
 
 - Share of Domestic CASA as on 31st March 2014 stood at 31.76%.
 
 - Global Advances increased by 21.0% (y-o-y) to Rs 3,97,006 crore by
 end-March 14. Within this, Domestic Advances rose by 21.3% to Rs
 2,72,169 crore and Overseas Advances surged by 20.2% to Rs 1,24,837
 crore.
 
 - Retail Credit of your Bank increased by 21.0% (y-o-y) to Rs 46,019
 crore during FY14, of which Home Loans increased by 21.9% to Rs 19,558
 crore.
 
 - Your Bank''s SME Credit portfolio increased by 21.2% (y-o-y) to Rs
 56,634 crore by end- March 2014. Farm Credit increased by 2.8% and
 reached the level of Rs 28,432 crore and Credit to Weaker Sections
 increased by 20.9% to Rs 20,599 crore.
 
 - Your Bank''s Operating Profit stood at Rs 9,291 crore (up 3.2%, y-o-y)
 and Net Profit at Rs 4,541 crore (up 1.3%, y-o-y) in FY14.
 
 - Return on Average Assets (ROAA) stood at 0.75% in line with market
 expectations.
 
 - Despite capital infusion, Return on Equity (ROE) was protected at
 13.0% as on 31st March 2014.
 
 - Your Bank managed to protect its NIM at 2.87% in Domestic Operations
 and at 2.36% in Global Operations during FY14 despite sluggish credit
 demand.
 
 - Given your Bank''s prudent approach, its Provision Coverage Ratio
 consistently improved throughout the year and stood at 65.45% as on 31
 stMarch 2014 - much higher in relative terms compared to its peers.
 
 - Your Bank''s Capital Strength gets reflected in its Capital Adequacy
 ratios. Its CRAR (Basel II) was at 12.87% and Tier I capital at 9.54%
 as on 31st March 2014. Its CRAR (Basel III) was at 12.28%, Tier 1
 Capital at 9.28% & Core Tier 1 Capital at 8.95% as on 31s''March 2014.
 
 - Your Bank''s Cost-Income Ratio continued to be at a relatively lower
 level of 43.44% for FY14.
 
 - While its Earning per Share stood at Rs 107.38, its Book Value per
 Share stood at Rs 813.50.
 
 Awards & Accolades
 
 During the year FY14, your Bank received several awards for its
 noteworthy performance across various business and financial
 parameters. The major ones were as follows.
 
 - Best Public Sector Bank under the category ''Global Business
 Development'' by Dun & Bradstreet - Polaris Financial Technology Banking
 Awards 2013.
 
 - Banking Technology Excellence Award 2013 among PSBs by IDRBT.
 
 - Your Bank was awarded 1st Rank in the Public Sector Bank Category in
 Financial Express-Ernst & Young Best Banks Survey 2012-13 published in
 The Financial Express Magazine March 2014 issue.
 
 - MSME Banking Excellence Award-2013 as the Best Bank in MSME by the
 Chamber of Indian Micro Small and Medium Enterprises.
 
 - The Sunday Standard Best Banker''s Award - Best Banker-HR constituted
 by The New Indian Express Group.
 
 - ASSOCHAM 9th Annual Banking Summit -cum-Social Banking Award
 2013-Winner in Public Sector Banks Category in the field of ''Social
 Banking''.
 
 - Excellence in Home Loan Banking Award by My FM Stars of the
 Industry.
 
 - The ''Global Excellence and Leadership Award'' in the category of 50
 most talented CSR Professionals of India by the World CSR Congress.
 
 These awards and recognition are particularly valuable, as they
 acknowledge the merits of your Bank''s successful business model that
 made a difference to the nation''s progress.
 
 Looking Forward
 
 We expect India''s economic growth to revive during FY15 on the back of
 political stability and likely stepping up of economic reforms. The
 growth in FY15 is expected to be spurred by the revival of investment,
 a boost to investment and consumer sentiment, continuing gains in
 employment and incomes and a firming in exports. With GDP growth
 expected to pick up, banking business is likely to witness higher
 optimism during FY15. According to India''s largest credit rating agency
 CRISIL - credit quality pressures are bottoming out for the Indian
 banking industry, even though improvement will be gradual due to
 continued economic uncertainties.
 
 During FY14, Bank of Baroda made significant progress towards building
 a preferred bank for its stakeholders. Despite challenging environment,
 its earnings remained resilient; its fresh slippages started easing and
 its strong funding position enabled it to continue to support its
 borrowers.
 
 During FY15, Bank of Baroda will continue to focus on further
 strengthening its capital and funding position so as to grow its
 business sustainably. Your Bank is confident that with its strategic
 focus on people, processes and technology, it will remain in the
 leadership position in the emerging business environment.
 
 Bank''s Corporate Goals and Strategy
 
 Supported by its achievements during FY14, your Bank has selected a
 motto that aptly described its commitment to move ahead in the global
 banking space. The Bank has identified RACE AHEAD as its motto for
 the FY15. The word RACE denotes the following:
 
 R for - Retail Leaning
 
 A for - Asset Quality
 
 C for - Capacity Building
 
 E for - Earnings
 
 Your Bank believes that focusing on these four aspects should help it
 in not only achieving a significant business growth but also improve
 its profitability and soundness indicators.
 
 To strengthen the approach towards Retail Leaning, your Bank will
 emphasize on aggressively canvassing low-cost current and saving
 deposits plus retail term deposits as against the high-cost bulk
 deposits. Simultaneously, the focus will be on Retail Credit, MSME and
 Agriculture credit to make the loan-book more diversified.
 
 Similar to its efforts to improve Asset Quality management in FY14,
 your Bank will focus on credit monitoring, NPA recovery and
 up-gradation in a big way and further arrest the fresh slippages.
 
 Capacity Building is another area where your Bank has been investing
 significantly. During FY14, your Bank opened 601 new Branches,
 installed 3,624 new ATMs, opened 45 e-Lobbies and provided a number of
 Bunch Note Acceptors, Self-service Pass book Printers, etc. to its
 branches. Your Bank also provided Note Counting Machines to almost all
 its branches and strengthened the structure of Retail and SME Loan
 Factories - its innovative business model - in the country. Your Bank
 will continue to give high priority to this aspect during FY15 to make
 its processes more efficient and customer service more prompt.
 
 To respond to increasing competition and other challenges, your Bank
 will make its business model more cost-efficient and try to improve its
 Earnings through an optimum mix of interest income and non-interest
 income. To achieve this, it will constantly optimise the use of
 technology as the change agent.
 
 Additionally, your Bank proposes to launch Adarsh Grameen Branches''
 shortly. These branches will be constructed by your Bank on its owned
 plot of land in rural areas and will include branch premises, manager''s
 residence and assembly areas. The assembly area will be having
 audio-visual facilities to enable various activities like agri-clinic,
 vocational education, medical camp etc. This Endeavour will not only
 provide your Bank to take forward the mission of Financial Inclusion,
 but also generate a lot of goodwill for your Bank.
 
 With its intrinsic strengths in the form of capital, human resources,
 technology and iconic brand, your Bank is well positioned for growth
 during FY15.
 
 We are encouraged by and grateful for the ongoing support of all our
 shareholders. I solicit your continued cooperation and patronage in
 future also. 
 
 S.S.Mundra Chairman & Managing Director
 
 NOTICE is hereby given that the 18th Annual General Meeting of the
 Shareholders of Bank of Baroda will be held on Wednesday, 25th June
 2014 at 10.30 a.m. at Sir Sayajirao Nagargriha, Vadodara Mahanagar Seva
 Sadan, T.P. - 1, F.P. 549/1, Near GEB Colony, Old Padra Road, Akota,
 Vadodara - 390020, to transact the following business:
 
 1.  To discuss, approve and adopt the Balance Sheet of the Bank as at
 31st March 2014, Profit and Loss Account for the year ended 31st March,
 2014, the report of the Board of Directors on the working and
 activities of the Bank for the period covered by the accounts and the
 Auditor''s Report on the Balance Sheet and Accounts.
 
 2.  To declare final dividend for the year 2013-14.
 
 
 
                                                   For Bank of Baroda
 
 
 
 
 Place : Mumbai                                           S.S. Mundra
 
 Date : 13th May 2014                  Chairman and Managing Director
Source : Dion Global Solutions Limited
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